Intel Faces Heat From Arm's Growing Popularity With Cloud Computing Giants Like Amazon and Microsoft

Softbank Group Corp SFTBF SFTBY Arm-based chips won market share in PCs and rivaled Intel Corp INTC in the increasingly crucial data-center market.
Arm's clientele included cloud-computing operators Amazon.com Inc AMZN, Microsoft Corp MSFT, Alphabet Inc GOOG GOOGL Google, Apple Inc AAPL as their data centers consumed a vast number of chips, the Wall Street Journal reports.
Amazon.com adopted the technology for its self-made server chips. Microsoft and Google worked on processors using building blocks licensed from Arm.
Apple launched two new versions of its in-house-designed Arm chips for MacBooks, ditching its long-preferred supplier for core processors, Intel.
Arm-based chips are the digital brains in more than 95% of smartphones, including all Apple iPhones.
Arm earns royalty payments on every chip made or sold using its design. Therefore, it generated $2.7 billion in revenue in 2021, still only about 3% the size of Intel.
Arm prepared for an initial public offering this year and is yet to decide where to list its shares, with political pressure in the U.K. to pick London.
Intel will likely post a 23% decline in revenue in its PC-focused business, according to FactSet.
Intel's server business sales will likely retreat 40% from the year prior, reflecting a weakening economy and loss of market share to its rival Advanced Micro Devices Inc AMD and Arm-based chips.
While global shipments of laptops will likely decline this year by a high single-digit percentage, those for Arm-based laptops could grow, according to Counterpoint Research.
Arm chips are now also found in virtual-reality headsets and autonomous vehicles.
Amazon's latest Graviton chips based on Arm are up to 60% more efficient than its Intel and AMD CPUs, Amazon.com VP Dave Brown said.
In 2022, AMD CEO Lisa Su said that her company was in the early phases of working on Arm-based chips, likely to find a place in video gaming consoles.
Price Action: INTC shares traded lower by 0.50% at $30.12 in the premarket on the last check Tuesday.